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The 1985 Mercedes 280E – slowing the speed of depreciation


As fuel prices keep climbing, motorists endlessly complain about what they pay at the pump.

Independent fuel retailers have always had the lowest prices, but the four cents a litre discount from shopper dockets have almost wiped them out.

The grocery duopoly have agreed to step back from 30 cents per litre discounts, but that still doesn’t stop them from having very deep pockets when it comes to sending the opposition broke through very aggressive pricing.

But, by my calculations, fuel is one of the lesser expenses when it comes to motoring.

The biggest expense by far is still there even when you’re not driving your car: depreciation.

As it is a cost you don’t find out about until trade-in time, it sits in the blind spot of most motorists.

Anyone who has divorced will know just how much it costs to trade up to the new model.

An average Holden Commodore SV6 would have cost you $43,790, plus on-road costs, in 2011.

In the past three years, you would have spent $6400 buying 4275 litres of unleaded petrol, assuming that you’d driven an average of 15,000 kilometres a year.

But, after three years, your beloved Holden Commodore is only worth $17,000 as a trade-in.

Allowing for the on-road costs at purchase, you’ve lost $30,000 in three years, or $200 per week, or 67 cents per kilometre, in depreciation alone.

Your Commodore is dropping in value by 26 per cent each and every year, and depreciation is nearly five times whatever was spent on fuel.

This explains why accountants are very frugal when it comes to buying cars, as they don’t like to spend money on depreciating assets.

The tax man does help generously if your vehicle is used for business, by offering a deductible depreciation allowance of 30 per cent.

But is there a way to avoid that hefty depreciation?

The answer is, “yes”.

In 1985 a trusted colleague shelled out $65,000 for a Mercedes 280E.

At the time it was a lot of money for what was a lot of car.

It was the last of the W123 series, which had been introduced in 1976.

My colleague knew that Mercs had a reputation for longevity, but he did not know that nearly 30 years later that he’d still be driving his 280E.

He’s now done 417,000 kilometres, enough to circumnavigate the Earth more than 10 times.

His car hasn’t needed any major mechanical repairs, and costs only $180 for each service every six months.

He’s only replaced the brake pads twice, an alternator and one radiator hose.

The paintwork and upholstery are as new, and it gets along very well thanks to its free-revving136 kilowatt six-cylinder engine.

Fuel consumption, by modern standards, is not that great: 16.7 litres per 100 kilometres around town, and 11.4 l/100km on the highway.

The 280E runs happily on normal unleaded petrol.

Safety was ahead of its time, with ABS and a driver airbag available as options on overseas models.

My colleague estimates that his old Mercedes is only depreciating at about $50 a year at present and, who knows, maybe in the future it might just start going up in value!

1985 Mercedes 280E

For: Reliable, and ownership lasts longer than most marriages.

Against: Modern engines use less fuel.

This car would suit: Retired psychiatrists.


                2.7 litre 6 cylinder petrol

136 kW power @ 5,800 rpm

240 Nm torque @ 4,500 rpm

4 speed automatic

16.7 l/100 km (city)

11.4 l/100km (highway)

$1000 – $3000 trade-in

$3000 – $5200 private sale


Fast facts:

Mercedes built 2.7 million W123 cars.

This model was always popular with Arab taxi fleets

Safe motoring,

Doctor Clive Fraser